The Correlation Between Employee Satisfaction & Company Success

You probably already know this, but sometimes it is nice to have a simple reminder on why employee satisfaction really matters. A key area for any company is the level of customer service being delivered by its employees.

Generally speaking, satisfied employees make for satisfied customers. In other words, if you take care of your employees, they will take care of your customers. This seems easy right? Well many companies fail to follow this simple rule and customers do notice....sometimes in a big way. Dissatisfied employees tend to relate that dissatisfaction in some way when interacting with customers.

For an employee to do an outstanding job, they need to believe in the company and they need to feel good about the company. After all, they are the people interacting with the customers every day and you want them to represent the company in a positive, professional manner.

Little things can make a big difference for employees. A positive relationship with a supervisor, for example, can lead to positive vibes from the employee to your customers. Recognition of a job well done through viable feedback, incentives, unexpected wage increases, PTO, promotions, etc. can make all the difference in the world in your employees' morale and performance.

Remember that a satisfied employee is more willing to elevate their performance and promote the company.

Burgers and Performance Management

Jerry Murrell of Five Guys Burgers and Fries talks about his philosophy when it comes to selling burgers in a recent Inc. article; http://www.inc.com/magazine/20100401/jerry-murrell-five-guys-burgers-and-fries.html

As I read the article, it struck me that our founder, Dave Arringdale, and Jerry are very much alike in their extreme passion for quality and customer service. We might not sell burgers....far from it....but it appears that our company and Five Guys are more alike than different.

Sure ReviewSNAP is a software application for performance management for organizations. And Five Guys sells juicy and tasty burgers and golden brown fries. But when Jerry Murrell talks about their best salesman being their customer, I think of Dave's words. He is a maniac about customer service and understands what Jerry Murrell understands. "Treat your customer right and they'll be your biggest advocate" he says.And when Jerry talks about buying only potatoes for their fries from north of the 42nd parallel, I chuckle because it sounds eerily familiar to our president's mantra about being the unchallenged leader in quality and going the extra mile to deliver outstanding quality. He's not talking about buying fries north of the 42nd parallel, but he does talk about doing the big things right and the little things exceptionally. When Jerry focuses on buying only potatoes grown north of the 42nd parallel, that is doing the little things exceptionally. I'm sure Jerry and Dave would get along very well.

I hope you enjoy the article. If you've ever eaten at a Five Guys, you'll get a better idea as to why they pack 'em in and have so many repeat customers.

Turning Satisfied Customers Into Loyal Customers

While building a customer base, businesses sometimes move too quickly and focus on quantity rather than quality. Just as organizations experience turnover in their employee ranks, turnover occurs in the customer base as well. The extent to which both occur has a significant influence on your bottom line.

There is a lot of emphasis these days on creating satisfied customers. But is having satisfied customers enough? In our research we found several sources that conducted surveys addressing the impact of customer satisfaction on loyalty to a particular vendor. Depending on the survey source, between 60 and 85 percent of customers who chose a new vendor indicated they were satisfied or very satisfied with their former vendor.

What these results say is that having satisfied customers is not always enough. Certainly the first step in a vendor - customer relationship is working hard to keep customers satisfied. If your customers aren't satisfied with the level of service you deliver, you can rest assured that there will be a high level of turnover within your customer base.

An important transformation needs to take place in the way businesses view their relationships with customers. The transformation involves moving customers from being satisfied to being loyal. It's important to keep in mind the fact that a satisfied customer isn't necessarily a loyal customer. Moving a customer from satsfied to loyal requires hard work, constant attention to the customer and diligence in delivering outstanding service consistently.

Any given customer can be satisfied with multiple suppliers of the same product or service. Does the level of satisfaction factor in? Possibly, but not likely. The more likely scenario that gets played out is that as long as a threshold level of satisfaction is achieved the customer will tend to buy from supplier(s) offering the best price. Clearly, price will always be a factor to some extent in terms of which supplier gets the business. But what happens when a supplier is able to differentiate itself in terms of building some degree of customer loyalty? Chances are good that price becomes less of an issue as loyalty increases.

Satisfaction allows you to be in the game, so to speak. Loyalty translates into repeat pruchases. When a company is able to achieve some degree of customer loyalty among its customer base, the rate of customer leakage drops and the share of a given customer's business increases. Bear in mind that not every customer will feel the same sense of loyalty even with the same level of effort applied. But, this point notwithstanding, customer loyalty can clearly correlate with increased sales and increase profits.

So how do you build customer loyalty? First, we need to briefly address loyalty as it relates to the product or service itself. Let's look at what we'll refer to as a commodity product. A commodity product (or service) is one that looks and functions identically or nearly identically to the competitions' product or service. In this case, there is little to differentiate on other than price or level of service. In the case of differentiated products or services, the various suppliers can point to subtle or not so subtle differences in the product or service in making their case for buying one over another. If a differentiated product or service clearly has a functional or benefit advantage over those of its competitors, short-term loyalty can be achieved based on that advantage alone. But in most cases competition simply upgrades their own product or service to deliver the same functionality or benefit as the superior product/service so over the long-haul the level of product/service-specific loyalty diminishes.

We address the issue of commodity versus differentiated products and services only to point out that in many ways and in most cases, there is really very little sustained product differentiation. The implication then is that we have to build loyalty in other ways. Here are some things to keep in mind when attempting to build customer loyalty:

• Let customers know that you are interested in them as a long-term customer. This implies that your people are very much geared to being problem solvers for the customers. They must understand that their jobs exist to solve customers' problems and to assist the customer on demand.
• Think in terms of developing relationships with the customer. This doesn't mean a vendor customer relationship. This means attempting to cultivate as many personal relationships as possible within the customer's organization. While this is often disputed, we firmly subscribe to the notion that people buy from people they like. And they buy from people they can trust. Perhaps the key differentiating variable in the business world today is people. The quality of people you put in front of your customers will clearly help separate you from your competition. Your sales force must have very high expectations established for them in terms of relationship development.
• Make every attempt to differentiate your product or service from the competition. Try to stay out in front in making your product or service more functional or beneficial to the customer. The essential ingredient here is value. Does the customer perceive that your product or service is worth more to them than your competitors' products or services?
• Serve the customer at extremely high levels. This means that your processes must be efficient, your people who have any interaction with customers must be highly trained in customer service skills and you must establish a culture with high expectations for serving the customers at very high levels. Nothing short of outstanding customer service can be expected with no exceptions granted.
• Think long-term. Your business needs to establish a stable customer base. Companies that have a short-term mentality rarely, if ever, build much customer loyalty. Don't go for the quick sale just to generate revenue. Build a strong relationship with the customer and sales will follow.
• Allow customers to provide you feedback easily and whenever they feel they need to do it. Encourage your customers to contact you with ideas, problems, concerns or with a pat on the back that can be passed on to employees for a job well done.
• Create an environment of high accountability, high performance, high morale and high productivity. Happy and productive employees will do a lot to build customer loyalty.
  

In summary, customer loyalty can be accomplished. But it does take hard work and constant management attention. Your sales force is an integral part of building customer loyalty. They need to fully understand their roles in building strong, long-term relationships with the customer.

Respond to Customer Inquiries and Complaints Promptly

With all the talk about customer service and responsiveness, it is interesting to note how many businesses talk a good game but just don't deliver. We can all relate experiences with businesses where an appropriate sense of urgency didn't seem to exist. One area that seems to stand out is responding to customer inquiries and complaints.

When a customer, or prospective customer, takes the time to contact a business they are looking for some type of assistance. They generally want initial information, additional information, resolution of a problem or they just want to sound off about an experience they have had with your organization. Unfortunately, most businesses do a mediocre job, at best, of responding to customers in a timely manner.

Most customers will expect to have their requests responded to in a reasonable time frame. But what is reasonable? There is no standard rule of thumb to define response time. Believe it or not, responsiveness is a strategic issue and can be used to differentiate your business from your competitors. Therefore, the standards you establish for responding to all customer issues will determine the level of differentiation you achieve. And the consistency with which you are able to respond quickly will go a long ways toward determining how loyal your customers become.
It seems that many managers are afraid to press their employees too much when it comes to responding to customers. Attitude has a lot to do with how customers are treated. What attitude do you convey about customers? Is it a casual one or is it a "customer first" attitude? Your employees will pick up on your attitude quickly and will often mirror it. At the very least they will understand how serious you are about serving the customer.

A business can't afford to be casual about how it deals with its customers. The "I'm too busy" or the "you are just one of many customers" excuses are just not acceptable! We experience and hear horror stories constantly about poor responsiveness. The level of incompetency in this arena is mind boggling. We often wonder how something so obvious goes so wrong in so many companies.

Responsiveness is part of your culture. Is yours a casual, "I'll get to it when I can" kind of culture or is it a "I put my customers above all else and make their issues a priority" kind of culture? This is a key and fundamental issue that needs to be addressed.

How would your employees answer these questions?

-When a customer calls and has a problem that requires a call back, how long does it take, on average, to call them back either with an answer or to let them know the problem is still being worked on?
-If a customer leaves a message for an employee, what are the expectations in terms of how much time can elapse before calling him/her back?
-What are the policies regarding responding to customers?
-How much training have employees had with regard to responding to customers in terms of time management, prioritization of customer issues and dealing with difficult or angry customers?
-At what level does decision making occur regarding customer problems and inquiries?
-How well do employees understand the company's products/services, its policies and what the next level or step in problem resolution is?

Setting extremely clear expectations about responding to customers is critical. To some organizations it might seem like a relatively minor issue. Those organizations are bound to struggle. Those that have figured out how to respond expediently, effectively and with a caring attitude distinctly have an advantage over their competition.

Don't Just Talk About Customer Service

There is so much lip service being paid to customer service these days with very little actually being done about it that it is almost laughable. How many organizations do you see promoting themselves as leaders in customer service or just generally bragging about how well they serve their customers? The truth is most organizations are not coming close to delivering even average customer service, let alone outstanding customer service which is what they should be striving for.

Just talking about customer service and telling your employees that they are to provide outstanding customer service is not going to affect the level of service to your customers enough to make any sort of positive difference. While some short-term buying decisions are based on price, over the long-haul customers will often base their decisions about who to buy from as much on the quality of service they receive as price. In fact, it appears that the relationship between business failure and poor customer service is dramatic. Conversely, those organizations that understand how to deliver outstanding customer service can often times overcome competitive pricing strategies by their competitors and still maintain strong gross profit margins.

Outstanding customer service is generally viewed as an added value by customers. Why? Because it is so rarely encountered that it leaves an impression when they do experience it.

Look closely at the level of customer service being delivered by your organization. It's not the perception of you and your employees that count. Rather, it is the perception of your customers that matters. Ask them how they feel about the quality of your customer service. Remember that you won't hear from many disgruntled customers. They just go away.

Do your employees really understand how to deliver outstanding customer service? Do they really understand what is expected of them? Does the company understand how to achieve outstanding customer service? Outstanding customer service stands out. It can truly help you differentiate your organization from your competition. To achieve it takes constant care and nurturing. It must be measured. Outstanding customer service needs to become a "trademark" of your company.

Hiring customer-oriented employees is the starting point for delivering outstanding customer service. Some employees will have a difficult time being customer-oriented because of their personality. Putting people with poor basic people skills in a position to deal with customers is a common mistake in the business world. Think about your own buying experiences and the people you encounter. How many really deliver outstanding service?

Look at your customer service quality objectively. Does it need work? How much work? Develop a plan for correcting deficiencies. Make outstanding customer service a part of your culture. It will pay dividends.

Don't Let Customer Service Be Your Downfall

Customer service is a broad term generally used to define how well customers are served by the organizations they do business with. Our experience and observations indicate that there has been a deterioration of customer service levels in many businesses in recent years. This stems primarily from poor attention to detail and a lack of a customer-orientation throughout the business. Bear in mind that your business should be striving to provide nothing short of outstanding customer service.

It is a well known fact that customer service is one of the primary factors in a customer's decision to purchase again from a particular business. When customer service falls below the expectations of the customer, the likelihood of that customer buying again from that business diminishes. Every contact that a customer has with a business should be considered an opportunity by the business to cement a relationship with the customer.

We believe there are three key components to providing outstanding customer service:
1) hiring,
2) discipline and
3) consistency.

Let's look at each of them in more detail:

Hiring. The ability to deliver outstanding customer service is, without question, dependent upon the quality of employees hired. Employees who are not able to deal with customers effectively can have a devastating effect on perceptions of the business. And employees who cannot execute according to well-defined procedures will cause mistakes, delays and frustration. Laziness and lack of a thorough screening process are key reasons why marginal employees are hired.

Discipline. This term refers to doing things right on a highly consistent basis. A key assumption is that your business has well-defined procedures and processes that are customer-oriented and efficient. Once those are established it is essential that there be a very clear expectation of all employees involved that they execute their tasks exactly as defined. Managers must be able to hold employees accountable for meeting that expectation! When employees are allowed to deviate from the process/procedure or not follow rules, there is a lack of discipline.

Consistency. Customers cannot be served well one time and poorly the next. Unfortunately, the vast majority of businesses do not consistently serve their customers at a high level. Think about your own experiences with the businesses you buy from. How many truly deliver outstanding customer service every time you deal with them? We suspect the answer is not many, if any at all.

The inability to deliver outstanding customer service consistently can be the downfall of a business. In simple terms, it can put you out of business. There exists an opportunity for the business that can figure out how to deal with the three components discussed above. Because few, if any, businesses concentrate enough on delivering outstanding customer service, a business that understands how to do it will gain a significant competitive advantage over its competition.

Take the time to evaluate your own business in terms of the three components identified above. Does your business honestly deliver outstanding customer service at a highly consistent level? If the answer is "yes", are you absolutely certain of your answer? We have found that many businesses that thought they were doing an excellent job of serving their customers were actually falling well short of customer expectations. Don't allow your business to fool itself into thinking customers are receiving outstanding service every time they have contact with your company.

Stay In Touch With Your Customers

In the early stages of building a business, the owner is heavily involved with selling and/or customer service and, therefore, in constant contact with customers. The owner has a good feel for what they want and their reactions to and perceptions of how you conduct business. As the business grows, the owner becomes less involved with hands-on operations and sales and loses the pulse of the market and the customer.

It is important for top management to stay very much in touch with customers. Finding the time can be difficult, but it might be one of the single most important activities an owner or manager can partake in.

One way of remaining close to the customer is to schedule specific times to ride with sales people, spend time on the retail floor or take calls in customer service. While it might sound like unproductive time, the amount of valuable information that can be obtained can be significant and, in some cases, critical to the success of the business.

A key is to be disciplined about staying involved with the customer. Avoid jumping in and doing it and then forgetting about it. Customers should also feel like they can talk directly to someone in top management. An open door policy for customers is an invitation for customers to let their feelings be known and for you to fix whatever problem they need fixed.

Being a customer-driven company means staying in close touch with customers. Too many owners and managers become almost arrogant about not wanting to deal directly with customers. Their attitude reflects their lack of understanding about how high performance companies achieve that status.

Start today with a customer contact program that puts you and other top management personnel in consistent and constant touch with your customer base. Develop a specific plan for getting these people out of their offices and into customer locations, on a phone with customers or on a retail floor interacting and dealing with customers.

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